This report is an updated version of the report published on 15 October 2025 at 12:08 PM AEDT.

Audinate Group Limited (ASX: AD8)

AD8 is a provider of professional audio-video (AV) networking technologies globally. The developer of the Dante® media networking solution is headquartered in Australia and has regional offices in the US, Belgium, Hong Kong, and the UK. Its Dante IP networking solution is used extensively in the professional live sound, commercial installation, broadcast, public address, and recording industries.

Recommendation Rationale – SELL at AUD 7.09 

• Revenue Downturn: Revenue from ordinary activities declined by 32.3% YoY to AUD 62.07mn in FY25 vs AUD 91.48mn in FY24. This decrease was primarily due to an inventory overhang among OEM customers, which led to a temporary slowdown in new orders for Dante-enabled chips, cards, and modules. Gross profit decreased to AUD 51.10mn in FY25 vs AUD 67.96mn in FY24.
• Trading Near Resistance: AD8’s stock has surpassed its R2 level recommended on 04 September 2025, and may face resistance at the current price level.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (EV/Sales and Price/Cash Flow) are higher than the median for the technology sector.
• Market Risk: The company has recently faced revenue and earnings pressure due to significant inventory destocking by its Original Equipment Manufacturer (OEM) customers, particularly in its core audio segment (chips, cards and modules). This indicates potential revenue volatility, with periods of strong sales potentially followed by weaker performance as customers work through excess stock.

 Daily Price Chart

Valuation Methodology: EV/Sales Multiple Approach (FY June'26E) (Illustrative)

The stock might trade at a slight discount to its peers considering the YoY decline in revenue in FY25, which was impacted by the OEM inventory overhang, as well as the YoY decrease in underlying EBITDA in FY25 for the same period. For conducting the valuation, peers including Megaport Ltd (ASX: MP1), Qoria Ltd (ASX: QOR) and Readytech Holdings Ltd (ASX: RDY) have been considered.

Considering that the stock has surpassed its R2 level, macroeconomic uncertainty, share price movement, current trading level, and risks associated, the share price can face consolidation at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 7.09, at 11:35 AM AEDT, as of 15 October 2025.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 15 October 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.